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Employment Allowance and employer National Insurance

Employers pay 15% National Insurance on each employee's pay above £5,000 a year. The Employment Allowance takes up to £10,500 off the bill for an eligible business.

The 2026/27 rates

Employer National Insurance is 15% of each employee's earnings above the secondary threshold of £5,000 a year, or £96 a week. The Employment Allowance is £10,500 for 2026/27, and since April 2025 employers with more than £100,000 of National Insurance can claim it.

A payroll of thirty carers

A care worker on 37.5 hours a week at £12.71 earns £24,784.50 a year. Employer National Insurance on that pay is £2,967.68, so the allowance covers the National Insurance on about three and a half full-time carers.

Thirty full-time carers and one Employment Allowance

Employer National Insurance covered by the allowanceEmployer National Insurance the business pays
  • Employer National Insurance, 30 workers at £2,967.68£89,030.40
  • Employment Allowance−£10,500.00
  • Employer National Insurance to pay£78,530.40
An example: 37.5 hours a week for 52 weeks at £12.71, 2026/27 rates. Source: HMRC, Rates and thresholds for employers 2026 to 2027.

Who can claim

GOV.UK says a business can claim if it does less than half its work in the public sector, giving local councils and NHS services as examples. Charities can claim either way. Connected companies get one allowance between them, claimed against one payroll.

HMRC's further guidance says work is of a public nature where more than 50% of it is done "in or for the public sector". Its examples include NHS services and "providing a meals on wheels service for a local council", and the share can be measured by staff, time or turnover. It names no care home or home care agency. If most of your income comes from council or NHS contracts, talk to us before you claim.

Section 4 of the same guidance says early years childcare providers can claim if they are private businesses or charities.

April 2027

At £13.21 an hour from 1 April 2027, the same full-time worker earns £25,759.50 and carries £3,113.93 of employer National Insurance, £146.25 more than in 2026/27.

How we help

We run your payroll, check Employment Allowance eligibility across connected companies, and include National Insurance in the cost per hour in our care staffing cost calculator.

Common questions

Can each home in a group claim its own Employment Allowance?

No. Where companies are connected, only one company in the group can claim.

Can a nursery claim the Employment Allowance?

HMRC's guidance says early years childcare providers can claim if they are private businesses or charities.

Related reading

The £13.21 National Living Wage and care staff costs

The cost of the April 2027 rise for each full-time care worker.

Sponsor licence costs for care employers

Who can still be sponsored, and the Home Office fees for each worker.

Holiday pay for care staff on irregular hours

Accrual at 12.07% and rolled-up holiday pay for bank and zero-hours carers.

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